8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 15, 2007

BARNES GROUP INC.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

1-04801	06-0247840
(Commission File Number)	(I.R.S. Employer Identification No.)
123 Main Street, Bristol, Connecticut	06011-0489
(Address of principal executive offices)	(Zip Code)

(860) 583-7070

Registrant's telephone number, including area code

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

-1-

Item 2.02	Results of Operations and Financial Condition.
	On February 15, 2007, Barnes Group Inc. issued a press release announcing the financial results of operations for the fourth quarter and full year ended December 31, 2006. A copy is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
	The information in this Current Report on 8-K and the exhibit attached hereto shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Exchange Act or Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.
Item 9.01	Financial Statements and Exhibits.
	Exhibit 99.1: Press Release issued February 15, 2007, announcing the financial results of operations for the fourth quarter and full year ended December 31, 2006.

SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated:  February 15, 2007	BARNES GROUP INC.
	(Registrant)
	By: /s/    WILLIAM C. DENNINGER
	William C. Denninger      Senior Vice President and      Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Document Description
99.1	Press Release, dated February 15, 2007

-2-

EX-99.1

Exhibit 99.1

Barnes Group Inc.

Corporate Office

Bristol, CT 06010

Tel: (860) 583-7070

   

Brian D. Koppy

Investor Relations

(860) 973-2126

Stephen J. McKelvey

Corporate Communications

(860) 973-2132

BARNES GROUP INC. ANNOUNCES RECORD

FOURTH QUARTER AND FULL YEAR 2006 FINANCIAL RESULTS

· 2006 annual net sales rise 14 percent to a record $1.3 billion.

· 2006 operating income increases 57 percent to $117 million, on an adjusted basis

· Net income up 54 percent from adjusted full year 2005; comparable diluted EPS up 42 percent

· Fourth quarter operating income increases 86 percent to $29.6 million

Bristol, Connecticut, February 15, 2007---Barnes Group Inc. (NYSE: B) today announced record financial results for the quarter and year ended December 31, 2006. For the full year 2006, Barnes Group’s net sales were $1.3 billion, up 14 percent from $1.1 billion in 2005. Operating income increased 57 percent to $117.0 million, for the full year 2006, from an adjusted $74.6 million in 2005. Net income for the full year 2006 was $73.8 million or $1.39 per diluted share, up 54 percent from an adjusted $47.9 million or $0.98 per diluted share in 2005.

References in this release to the full year 2005 adjusted net income, adjusted net income per diluted share, and adjusted operating income are non-GAAP financial measures which are detailed on the non-GAAP financial reconciliations at the end of the press release.

Net sales for the fourth quarter 2006 were $328.8 million, up 19 percent from $276.4 million in the fourth quarter 2005. Operating income increased 86 percent to $29.6 million in the fourth quarter 2006 from $16.0 million in the same period last year. Net income in the fourth quarter increased 83 percent to $18.5 million, or $0.34 per diluted share, as compared to net income of $10.1 million or $0.20 per diluted share, in the previous fourth quarter, excluding the cumulative effect of a change in accounting principle.

“Barnes Group continued its sound performance in the fourth quarter. All three of our business units generated double-digit sales growth. Operating income grew as a result of our operational improvements and continued benefits from strategic acquisitions and alliances,” said Gregory F. Milzcik, President and Chief Executive Officer, Barnes Group Inc. “Our full year 2006 results provide us with the momentum to build upon our initiatives to achieve continued growth for Barnes Group and increased value for our stockholders.”

“As we enter 2007, Barnes Group is well positioned for continued growth. The Company’s targeted earnings for the full year 2007 are in the range of $1.53 to $1.60 per dilute share, which is in line with our

Barnes Group Inc. / 2

objective of achieving over time an average of 10 percent to 15 percent annual earnings per share growth,” said William C. Denninger, Senior Vice President, Finance and Chief Financial Officer, Barnes Group Inc.

Fourth quarter 2006 sales at Barnes Distribution were $141.6 million, up 26 percent from $112.8 million in the same period last year. Driving the fourth quarter 2006 sales growth were broad-based increases in Barnes Distribution North America, including double-digit increases in Corporate and Tier II accounts, and gains in Europe and the Raymond division. Barnes Distribution Europe’s fourth quarter sales were positively impacted by $20.8 million from the second quarter acquisition of KENT. Foreign exchange positively affected sales by $1.9 million in the fourth quarter.

Operating profit in the fourth quarter for Barnes Distribution was $4.5 million, up 9 percent from $4.2 million in the fourth quarter of 2005. Operating profits benefited from higher sales volume and a reduction of distribution costs as a percentage of sales and a $1.5 million gain on the sale of a distribution facility in Canada. Results were adversely affected by KENT integration activities, which resulted in a $1.7 million severance charge for the planned closure of a distribution center in France.

Full year 2006 sales at Barnes Distribution were $526.9 million, up 16% from $453.8 million in 2005. Operating profit in 2006 was up 52 percent to $31.5 million, compared to an adjusted 2005 operating profit of $20.8 million. The increase in operating profit was primarily due to higher sales volume and contributions from acquisitions.

“Barnes Distribution surpassed $500 million in sales for the first time,” said Idelle K. Wolf, President, Barnes Distribution. “We achieved this significant milestone by a sustained focus on customer service and strategic initiatives.”

Fourth quarter 2006 sales at Associated Spring were $110.9 million, up 10 percent, from $101.1 million in the fourth quarter of 2005. Included in this sales increase were $7.2 million from the recently acquired Heinz Hänggi GmbH and a $2.6 million favorable impact from foreign exchange. End market sales continued to benefit from strong momentum in telecommunications and heavy duty truck. Associated Spring’s sales within the transportation and industrial markets were essentially flat, excluding the Heinz Hänggi acquisition.

Operating profit was up 190 percent to $13.0 million in the fourth quarter 2006, from $4.5 million in the comparable 2005 quarter. Operating profit in the fourth quarter was positively impacted by contributions from Heinz Hänggi, gross margin improvements and cost containment initiatives.

For all of 2006, sales at Associated Spring were $445.9 million, up 6 percent from $422.4 million in 2005. Operating profit increased 50 percent to $42.9 million, compared to a 2005 operating profit of $28.6 million. Driving this increase were improvements in traditional operations and profit contributions from the recent acquisition of Heinz Hänggi.

“Associated Spring’s fourth quarter results reflect the benefits of our continuing operational improvements throughout the organization,” said Jerry W. Burris, President, Associated Spring. “We are committed to profitable sales growth and improving operational efficiencies in 2007.”

Fourth quarter 2006 sales at Barnes Aerospace were $78.8 million, up 23 percent from $64.2 million in the comparable 2005 quarter as original equipment manufacturer (OEM) and aftermarket sales increased 10 percent and 58 percent, respectively.

Barnes Group Inc. / 3

Barnes Aerospace generated orders of $113.7 million in the fourth quarter, up 46 percent from $77.7 million in the same period last year. Commercial OEM orders were $58.4 million and military orders were $26.6 million in the fourth quarter of 2006. Order backlog was $403.0 million, up 10 percent from September 30, 2006.

Operating profit increased 66 percent in the fourth quarter 2006 to $12.2 million, up from $7.3 million in the same period last year. The increase in operating profit was positively impacted by higher sales volume and an increased percentage of higher margin aftermarket activity.

For all of 2006, sales at Barnes Aerospace were $296.9 million, up 26 percent from $235.4 million for the full year 2005. Operating profit for 2006 increased 67 percent to $42.7 million, compared to $25.5 million in 2005.

“Barnes Aerospace achieved another year of solid results in 2006 with historical highs in sales, orders, backlog and operating profit,” said Patrick J. Dempsey, President, Barnes Aerospace. “Barnes Aerospace’s accelerated growth is driven by our continued pursuit of a portfolio strategy that maintains our focus on key aerospace platforms and operational efficiencies that drive sustainable profitable growth.”

“This year, Barnes Group is celebrating the150^th anniversary of its founding. Barnes Group has a history of innovation and technological advances in manufacturing and distribution. A business that began as a small manufacturer in Bristol, Connecticut, USA, has become a diversified world leader in engineering and manufacturing of precision industrial components, and a distributor of a broad range of maintenance, repair, operating and production supplies. Though the markets and the environments have changed through the years, Barnes Group’s talented employees and culture of innovation have enabled the Company to serve its customers for a century and a half,” commented Milzcik.

Celebrating its 150^th anniversary in 2007, Barnes Group Inc. (NYSE:B) is an international diversified aerospace and industrial components manufacturing and distribution company focused on achieving consistent, sustainable and predictable results. Founded in 1857, Barnes Group consists of three businesses: Barnes Distribution, Associated Spring and Barnes Aerospace. Over 6,600 dedicated employees at more than 65 locations worldwide contribute to Barnes Group Inc.’s success. The Company has paid cash dividends to stockholders on a continuous basis since 1934. For more information, visit www.barnesgroupinc.com.

This release may contain certain forward-looking statements as defined in the Private Securities Litigation and Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed in the forward-looking statements. The risks and uncertainties, which are described in our periodic filings with the Securities and Exchange Commission, include, among others, uncertainties arising from the behavior of financial markets; future financial performance of the industries or customers that we serve; changes in market demand for our products and services; integration of acquired businesses; changes in raw material prices and availability; our dependence upon revenues and earnings from a small number of significant customers; uninsured claims; and numerous other matters of global, regional or national scale, including those of a political, economic, business, competitive, regulatory and public health nature. The Company assumes no obligation to update our forward-looking statements.

# # #

Barnes Group Inc. / 4

BARNES GROUP INC. CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share data) Unaudited
	Three months ended December 31,									Twelve months ended December 31,
	2006			2005			% Change			2006			2005			% Change
				(note 1)									(note 1)
Net sales	$	328,830		$	276,406			19		$	1,259,656		$	1,102,174			14
Cost of sales (note 2)		204,976			178,916			15			797,472			705,488			13
Selling and administrative expenses		94,209			81,533			16			345,148			320,301			8
		299,185			260,449			15			1,142,620			1,025,789			11
Operating income		29,645			15,957			86			117,036			76,385			53
Operating margin		9.0	%		5.8	%					9.3	%		6.9	%
Other income (note 3)		325			384			(15	)		1,181			10,449			(89	)
Interest expense		6,785			4,659			46			23,691			17,551			35
Other expenses		590			416			42			1,284			1,132			14
Income before income taxes and cumulative effect of a change in accounting principle		22,595			11,266			NM			93,242			68,151			37
Income taxes (note 2, 3 and 4)		4,091			1,179			NM			19,397			13,609			43
Income before cumulative effect of a change in accounting principle		18,504			10,087			83			73,845			54,542			35
Cumulative effect of a change in accounting principle, net of $190 of income taxes (note 5)		- -			(391	)		NM			- -			(391	)		NM
Net income	$	18,504		$	9,696			91		$	73,845		$	54,151			36
Common Dividends	$	6,543		$	5,275			24		$	24,803		$	19,879			25
Per common share: (note 6)
Net income per share - basic:
Income before change in accounting principle	$	0.35		$	0.21			67		$	1.46		$	1.16			26
Cumulative effect of change in accounting principle, net of tax		- -			(0.01	)		NM			- -			(0.01	)		NM
Net income	$	0.35		$	0.20			75		$	1.46		$	1.15			27
Net income per share - diluted:
Income before change in accounting principle	$	0.34		$	0.20			70		$	1.39		$	1.11			25
Cumulative effect of change in accounting   principle, net of tax		- -			(0.01	)		NM			- -			(0.01	)		NM
Net income	$	0.34		$	0.19			79		$	1.39		$	1.10			26
Dividends	$	0.125		$	0.110			14		$	0.485		$	0.420			16
Average common shares outstanding:
Basic		52,230,649			47,800,602			9			50,702,992			47,197,650			7
Diluted		54,509,396			49,853,582			9			52,943,494			49,018,382			8

NM- not meaningful

Footnotes:

⁽¹⁾ Adjusted to reflect the change in accounting for stock-based compensation in accordance with SFAS 123R.

⁽²⁾ Full year 2005 cost of sales includes a $1,814 ($1,141 after tax, or $0.02 diluted EPS) positive adjustment related to accounts payable.

⁽³⁾ Full year 2005 other income includes the $8,892 gain ($4,030 after tax, or $0.08 diluted EPS) on the sale of the NASCO investment.

⁽⁴⁾ Full year 2005 taxes include a $2,553 benefit ($0.05 diluted EPS) of which $1,473 ($0.03 diluted EPS) relates to prior years, relating to the granting of Pioneer tax status in Singapore.

⁽⁵⁾ In the fourth quarter of 2005, the Company adopted FIN No. 47, "Accounting for Conditional Asset Retirement Obligations," resulting in a change of $391, net of taxes, or $0.01 per share.

⁽⁶⁾ All per share amounts have been adjusted to reflect the effect of the 2-for-1 stock split in the second quarter of 2006.

Barnes Group Inc. / 5

BARNES GROUP INC. OPERATIONS BY REPORTABLE BUSINESS SEGMENT (Dollars in thousands) Unaudited
	Three months ended December 31,									Twelve months ended December 31,
	2006			2005			% Change			2006			2005			% Change
Net Sales
Barnes Distribution	$	141,586		$	112,848			26		$	526,901		$	453,754			16
Associated Spring		110,888			101,120			10			445,947			422,403			6
Barnes Aerospace		78,839			64,183			23			296,887			235,420			26
Intersegment sales		(2,483	)		(1,745	)		(42	)		(10,079	)		(9,403	)		(7	)
Total net sales	$	328,830		$	276,406			19		$	1,259,656		$	1,102,174			14
Operating profit (note 1)
Barnes Distribution (note 2)	$	4,531		$	4,175			9		$	31,530		$	22,566			40
Associated Spring		12,997			4,480			NM			42,909			28,576			50
Barnes Aerospace		12,164			7,348			66			42,658			25,497			67
Total operating profit		29,692			16,003			86			117,097			76,639			53
Interest income		278			310			(10	)		1,070			1,213			(12	)
Interest expense		(6,785	)		(4,659	)		46			(23,691	)		(17,551	)		35
Other income (expense), net (note 3)		(590	)		(388	)		52			(1,234	)		7,850			NM
Income before income taxes	$	22,595		$	11,266			NM		$	93,242		$	68,151			37

NM- not meaningful

Footnotes:

⁽¹⁾ Adjusted to reflect the change in accounting for stock-based compensation in accordance with SFAS 123R.

⁽²⁾ Barnes Distribution full year 2005 operating profit includes a $1,814 positive adjustment to accounts payable.

⁽³⁾ Full year 2005 other income includes the $8,892 gain on the April sale of the NASCO investment.

Barnes Group Inc. / 6

BARNES GROUP INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands) Unaudited
Assets	December 31, 2006		December 31, 2005
Current assets			(note 1)
Cash and cash equivalents	$	35,360	$	28,112
Accounts receivable		190,775		155,595
Inventories		198,960		159,238
Deferred income taxes		24,923		24,563
Prepaid expenses		11,196		11,157
Total current assets		461,214		378,665
Deferred income taxes		23,544		22,478
Property, plant and equipment, net		209,645		157,056
Goodwill		358,600		235,299
Other intangible assets, net		236,561		163,849
Other assets		46,887		48,513
Total assets	$	1,336,451	$	1,005,860
Liabilities and Stockholders' Equity
Current liabilities
Notes payable	$	5,600	$	4,000
Accounts payable		141,345		120,158
Accrued liabilities		102,951		93,615
Long-term debt-current		45,164		40,084
Total current liabilities		295,060		257,857
Long-term debt		376,318		241,941
Accrued retirement benefits		114,757		88,036
Other liabilities		30,521		16,869
Stockholders' equity		519,795		401,157
Total liabilities and stockholders' equity	$	1,336,451	$	1,005,860

Footnote:

⁽¹⁾ Periods prior to 1/1/06 adjusted to reflect the change in accounting for stock-based compensation in accordance with SFAS 123R.

Barnes Group Inc. / 7

BARNES GROUP INC. NON-GAAP FINANCIAL MEASURE RECONCILIATION (Dollars in thousands, except per share data) Unaudited
Following is a reconciliation of results excluding adjustments to the Company's reported results:
	Year ended December 31, 2005
	As reported			Adjustments			As adjusted
	(note 1)
Net sales
Barnes Distribution	$	453,754					$	453,754
Associated Spring		422,403						422,403
Barnes Aerospace		235,420						235,420
Intersegment sales		(9,403	)					(9,403	)
Total net sales	$	1,102,174					$	1,102,174
Operating profit
Barnes Distribution (note 2)	$	22,566		$	(1,814	)	$	20,752
		5.0	%					4.6	%
Associated Spring		28,576						28,576
		6.8	%					6.8	%
Barnes Aerospace		25,497						25,497
		10.8	%					10.8	%
Total operating profit	$	76,639		$	(1,814	)	$	74,825
Consolidated results:
Net sales	$	1,102,174					$	1,102,174
Cost of sales (note 2)		705,488		$	1,814			707,302
Selling and administrative expenses		320,301						320,301
		1,025,789			1,814			1,027,603
Operating income		76,385			(1,814	)		74,571
Operating margin		6.9	%					6.8	%
Other income (note 4)		10,449			(8,892	)		1,557
Interest expense		17,551						17,551
Other expenses		1,132						1,132
Income before income taxes		68,151			(10,706	)		57,445
Income taxes (notes 2, 3 and 4)		13,609			(4,062	)		9,547
Income before cumulative effect of a change in accounting principle		54,542			(6,644	)		47,898
Cumulative effect of a change in accounting principle, net of income taxes of $190   (note 5)		(391	)		391			-
Net income	$	54,151		$	(6,253	)	$	47,898
Net income per common share - diluted	$	1.10		$	(0.12	)	$	0.98

Footnotes:

(1) Periods prior to January 1, 2006 have been adjusted to reflect the change in accounting for stock-based compensation in accordance with SFAS No. 123R. All per-share amounts have been adjusted to reflect the effect of the 2-for-1 stock split in the second quarter of 2006.

The Company has presented certain financial measurements, excluding certain discrete items. These discrete items include:

(2) As part of management's ongoing internal control assessment, during the third quarter of 2005, the Company identified and recorded an adjustment to accounts payable and cost of sales at Barnes Distribution. The Company determined that cost of sales was overstated in prior periods due to inaccuracies in recording inventory receipts from 2000 through 2005. This overstatement was corrected in the third quarter of 2005 as a reduction to cost of sales of $1,814. The after-tax effect of this adjustment was $1,141, or $0.02 per diluted share. Management concluded that such corrections were immaterial, both quantitatively and qualitatively, to the 2005 financial statements and to the previously reported results of the prior years to which they relate.

(3) During the third quarter of 2005, the Company was granted Pioneer tax status in Singapore and recorded retroactive tax benefits of which $1,473, or $0.03 per diluted share, related to periods prior to January 1, 2005.

(4) During the second quarter of 2005, the Company sold its 45 percent interest in NHK-Associated Spring Suspension Components Inc. ("NASCO"), resulting in a pre-tax gain of $8,892 and an after-tax gain of $4,030, or $0.08 per diluted share.

(5) In the fourth quarter of 2005, the Company adopted FIN No. 47, "Accounting for Conditional Asset Retirement Obligations," resulting in a charge of $391, net of taxes, or $0.01 per diluted share.

These adjustments represent discrete items and an out-of-period adjustment. Management believes that providing results, excluding these items, is useful to investors when comparing year-over-year results of operations. Management does not intend results excluding these adjustments to represent results as defined by GAAP, and the reader should not consider it as an alternative measurement calculated in accordance with GAAP or as an indicator of the Company's operating performance. Accordingly, the measurements have limitations depending on their use.

Barnes Group Inc. / 8

BARNES GROUP INC. NON-GAAP FINANCIAL MEASURE RECONCILIATION (Dollars in thousands, except per share data) Unaudited
Following is a reconciliation of results excluding certain adjustments to the Company's reported results:
	Three months ended
	March 31, 2005		June 30, 2005			September 30, 2005			December 31, 2005		Full year 2005
Net income per common share - diluted, as reported (note 1)	$	0.24	$	0.36		$	0.31		$	0.19	$	1.10
Cumulative effect of change in accounting principle (note 2)		-		-			-			0.01		0.01
Accounts payable adjustment (note 3)		-		-			(0.02	)		-		(0.02	)
Singapore tax benefit - prior year (note 4)		-		-			(0.03	)		-		(0.03	)
Singapore tax benefit - reclassification (note 4)		0.01		0.01			(0.02	)		-		-
Gain on sale of NASCO (note 5)		-		(0.08	)		-			-		(0.08	)
Net income per common share - diluted, excluding cumulative effect of change in accounting principle and adjustments	$	0.25	$	0.29		$	0.24		$	0.20	$	0.98

Footnotes:

(1) Periods prior to January 1, 2006 have been adjusted to reflect the change in accounting for stock-based compensation in accordance with SFAS No. 123R. All per-share amounts have been adjusted to reflect the effect of the 2-for-1 stock split in the second quarter of 2006.

The Company has presented certain per share financial measurements, excluding the cumulative effect of a change in accounting principle, a positive adjustment related to accounts payable, certain retroactive tax benefits and the gain on the sale of NASCO as follows:

(2) In the fourth quarter of 2005, the Company adopted FIN No. 47, "Accounting for Conditional Asset Retirement Obligations," resulting in a charge of $391, or $0.01 per diluted share, net of taxes.

(3) As part of management's ongoing internal control assessment, during the third quarter of 2005, the Company identified and recorded an adjustment to accounts payable and cost of sales at Barnes Distribution. The Company determined that cost of sales was overstated in prior periods due to inaccuracies in recording inventory receipts from 2000 through 2005. This overstatement was corrected in the third quarter of 2005 as a reduction to cost of sales of $1,814. The after-tax effect of this adjustment was $1,141, or $0.02 per diluted share. Management concluded that such corrections were immaterial, both quantitatively and qualitatively, to the 2005 financial statements and to the previously reported results of the prior years to which they relate.

(4) During the third quarter of 2005, the Company was granted Pioneer tax status in Singapore and recorded retroactive tax benefits of $2,553 of which $1,473, or $0.03 per diluted share, related to periods prior to January 1, 2005 and $1,080, or $0.02 per diluted share, related to the first half of 2005 ($0.01 in each of the first and second quarters of 2005).

(5) During the second quarter of 2005, the Company sold its 45 percent interest in NHK-Associated Spring Suspension Components Inc. ("NASCO"), resulting in a pre-tax gain of $8,892 and an after-tax gain of $4,030, or $0.08 per diluted share.

These adjustments represent discrete items and an out-of-period adjustment. Management believes that providing results excluding these items is useful to investors when comparing year-over-year results of operations. Management does not intend results excluding the adjustments to represent results as defined by GAAP, and the reader should not consider it as an alternative measurement calculated in accordance with GAAP, or as an indicator of the Company's operating performance. Accordingly, the measurements have limitations depending on their use.